Inflation in Nursing Homes’ Rating System

Healthcare Finance News reported on how many for-profit chains are cheating the Five-Star Quality Rating System on Nursing Home Compare. The five-star rating system that Medicare uses to compare nursing homes is made up of three components: employing a base score from an on-site inspection, along with two scores from information on staffing and quality reported by the facility. These overall ratings have climbed higher as self-reported scores have inexplicably trended upward.

A new study of nursing homes in California, the nation’s largest system, by faculty at Florida Atlantic University and the University of Connecticut found that nursing homes inflate their self-assessment reporting to improve their score in the Five-Star Quality Rating System employed by Medicare to help consumers. Among the findings were that nursing homes that have more to gain financially from higher ratings are more likely to improve their overall rating through self-reporting.

The report states “We find a significant association between the changes in a nursing home’s star rating and its profits, which points to a financial incentive for nursing homes to improve the ratings.”